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A mortgage scam that resulted in the origination of $49.6 million in fraudulent loans led to the indictment of seven defendants in North Carolina this week.

An investigation led by the U.S. Attorney for the Southern District of Florida, the FBI, the FDIC and the Office of the Inspector General ended up charging the co-conspirators for causing the approval of millions of dollars in fraudulent loans. The scam harmed big banks such as Bank of America (BAC), Regions Bank (RF), SunTrust Bank (STI) and Wachovia Bank.

The indictment accuses the co-conspirators of causing $49.6 million in fraudulent loan originations, with many of the properties consisting of vacant lots in a North Carolina community development.

Authorities claim the conspirators recruited straw buyers to acquire lots in a Hampton Springs development. The buyers financed the purchase of various building lots using mortgages, while also obtaining construction loans.

False documents and loan applications were submitted to lenders to fund the fictional transactions.

One of the defendants, Victor Miguel Vidal, a loan officer at SunTrust Mortgage, helped carry out the scheme by ushering the fraudulent applications through the loan approval process – including applications for $33 million in construction loans.

Kerri Ann Panchuk was the Online Editor of HousingWire.com, and regular contributor to HousingWire magazine. Kerri joined HousingWire as a Reporter in early 2011 and since earned a law degree from Southern Methodist University. She previously worked at the Dallas Business Journal.

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